Ahead of the Curve provides you with analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity and FOREX markets are discussed.

About

Ahead of the Curve provides you with analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity and FOREX markets are discussed. Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Tuesday, 12 December 2017

Most periods of excessive booms end with speculative busts. The dotcom bust of 2000 produced a recession so did the housing bust of 2008. Today's poster child seems to be bitcoin. Just as the internet was here to stay back in 2000 so is block chain technology today. However crypto currencies are trading at levels suggesting they could become reserve currencies of the world replacing the dollar and that implies a reset on short order. It's never different and always the same:

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Wednesday, 6 December 2017

The spread between 10 year US bonds and 2 year US bonds is currently at 5 year lows and will likely go negative post the fed rate hike next week. This would most likely cause the US yield curve to eventually invert and is a harbinger of a decelerating/recessionary economy going forward. Will tax cuts save the day? I doubt it.

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Thursday, 8 December 2016

Gold prices have been incredibly volatile this year and are currently near the middle of the observed range in 2016 near $ 1175/ Ounce having started the year close to $1075 / Ounce and trading as high as $1375 / Ounce during the course of the year. Gold often benefits from increased liquidity in the financial system and has been traditionally viewed as a hedge against inflation. Gold also tends to have a safe haven status and tends to benefit during financial crises when Central Banks flood the world with liquidity. So thinking ahead lets take a look at what is in store for Gold prices?

To do this let us look at the historical performance of Gold since the Great Recession of 2008. Three years after the start of the Bernanke Fed's quantitative easing
program in the United States, gold prices reached a high we've still yet
to see again as this gold chart based on events that affected the price
of gold and gold IRAs over
the past few years since the Financial Collapse of 2008 shows.
Recovering back from its January 2016 low by March, another peak in May
before reaching July's high of around $1387 per ounce so far this year
for GCG7 (February Gold Futures) traded on CME and Eurex exchanges looks
a bit short-lived, given today's February Gold Futures price of $1173
as on December 8 2016.

As can be seen above Gold surged sharply higher between 2008 and 2011 following Quantitative easing (QE) embarked by central banks across the globe. The gold price well over doubled from reaching as high as $1975 in August 2011. From there Gold endured a sharp correcting falling over 40% and reaching the $1050 mark in December 2015 following the first FED rate hike and the end of QE. With no further FED hikes forth coming Gold resumed its upswing reaching a high of $1387 following Brexit. However following the Trump win in the US presidential election Gold has sold off yet again on prospects of reflation, a strong Dollar and an upcoming FED hike.

With the FED taking center stage yet again It would be interesting to see if the sell off in Gold continues on a strengthening Dollar from a possible FED hike or Would gold become a safe haven play yet again much like in December 2015 and benefit from capital outflows from risky assets like stocks and emerging market currencies?

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Tuesday, 11 October 2016

The chart of the week is courtesy Mike Shedlock via SafeHaven and looks at real Gross Domestic Income (GDI) in the US. Every time GDI has turned negative we have had pretty significant slowdowns or recessions. The GDI has just entered negative territory indicating another major slowdown is just around the corner:

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Monday, 18 July 2016

The Chart of the day is via Chris Vermeulen from the goldandoilguy.com and shows a comparison of the price performance of Lehman Brothers in 2008 to the current price performance of Deutsche Bank today. With a number of European and US banks having similar charts to Deutsche Bank and the bank index not confirming recent new highs in the broader market, once can all but wonder if a repeat of 2008 is on the cards:

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Tuesday, 5 July 2016

The chart of the week is courtesy of Bloomberg and shows historic and projected levels for Global GDP. Global GDP has remained below levels observed before the great recession of 2008-2009 and is expected to remain so for the foreseeable future:

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Thursday, 12 May 2016

An interesting article from John Rubino via SafeHaven that highlights parallels between the rapidly deteriorating performance of retailers and global financial institutions, very similar to that observed in 2008:

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Tuesday, 10 May 2016

The chart of the day comes courtesy The Telegraph and shows Non-Financial corporate debt in emerging markets hitting record levels in several key currencies. The debt is well over 20 Trillion dollars and is over double the amount observed in 2008 prior to the great recession.

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Thursday, 21 April 2016

The chart of the day shows the velocity of money (data courtesy the St. Louis Fed) since 1959. It shows that the velocity of money is below levels observed in 1959. The velocity of money typically rises during periods of growth and falls during recessionary periods. So the recent plunge to new lows suggests that QE's from global central banks have really not worked and a major recession may just be lurking around the corner.

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Last but not the least the Safehaven plunge into Gold,Treasuries & the Japanese yen is clearly taking hold as pointed out by Chris Vermeulen via CNA Finance:

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

For the fifth time in seven years Japan is back in recession, with GDP shrinking by a further 0.2% in the third quarter. Meanwhile, inflation has fallen from more than 2% to zero in just over six months.

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Refurbished MacBooks

My Asset Allocation Strategy (Indian Market)

My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.